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Where Did the Idea of Obamacare Come From? A Defense of the Heritage Foundation

On more than one occasion, President Obama has said that the core idea behind Obamacare came from the Heritage Foundation, and Politifact rates the claim as “mostly true.” More than one left-of-center commentator has made the same charge, often tracing the lineage from the Heritage building in Washington, DC, to Mitt Romney’s health reform in Massachusetts to the Obama administration. Most recently, John Aravosis, writing at the America Blog, claimed that the core idea behind Obamacare (the individual mandate) comes from a 1989 lecture by Stuart Butler, then a health economist at Heritage. The same notion is almost as common on the right as it is on the left.

There is just one problem. This is all malarkey.

What is Obamacare? If you sift through the hundreds of pages of legislation, the thousands of pages of regulations, and all of the ridiculous complexity, you will find that Obamacare in its essence is a bastardized form of what health economists call “managed competition.” Far from being a strange and scary idea, managed competition is the name we give to the health benefits program for federal employees and to similar systems for the employees of most state governments and most state universities.

John C. Goodman is a Senior Fellow at the Independent Institute, President of the Goodman Institute for Public Policy Research, and author of the widely acclaimed Independent books, A Better Choice: Healthcare Solutions for America, and the award-winning, Priceless: Curing the Healthcare Crisis. The Wall Street Journal and the National Journal, among other media, have called him the “Father of Health Savings Accounts.”

New from John C. Goodman!
A BETTER CHOICE: Healthcare Solutions for America
Obamacare remains highly controversial and faces ongoing legal and political challenges. Polls show that by a large margin Americans remain opposed to the healthcare law and seek to “repeal and replace” it. However, the question is: Replace it with what?

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